After yesterday’s letter from Microsoft (NSDQ: MSFT), Yahoo (NSDQ: YHOO) is planning to send a return letter, outlining it is not opposed to the deal at a price higher than $31 a share, reporters Reuters (NSDQ: RTRSY), citing sources. It will also contend MSFT’s notion that Yahoo’s business is deteriorating, though hard to argue on facts there.

Meanwhile, Yahoo has exactly 20 days to come to some agreement, or Microsoft has threatened to start its proxy bid. And may even reduce its big price, it hinted in the letter yesterday.